Belarusian authorities keen to avoid repeat scenario of 2010 elections

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April 22, 2016 18:56

The Liberal Democratic Party’s call to hold early presidential elections should prompt the opposition to nominate a "single candidate" and limit the number of candidates. While preparing for the 2015 elections, the Belarusian leadership will be cautious not to repeat the 2010 elections scenario, which caused a deep rift within Belarusian society and thrust Belarus into deeper international isolation. The Belarusian government is unlikely to consider holding presidential elections at an early date.

The Liberal Democratic Party (LDP) has appealed to the President, the Parliament and the Central Election Commission to hold early presidential elections in Belarus: in March – April 2015.

The next presidential elections in Belarus should take place no later than November 20th, 2015. In the past, presidential electoral campaigns have taken place in summer/autumn of 2001, in winter/spring of 2006, and autumn/winter of 2010. Elections have been called earlier than expected several times. However, the timing had little effect, if any, on the official results announced by the Central Election Commission.

Amid falling incomes in Belarus, President Lukashenko’s electoral rating remains high at 39.8% (IISEPS polls). Events in Ukraine and the growing instability in the region due to the Kremlin’s aggressive policy has fuelled Belarusians’ demand for a strong leader who can guarantee political stability and meet their socio-economic needs. 

The Liberal Democratic Party describes itself as a “constructive” opposition to the current government. Its leader, Sergei Gaidukevich, has twice run for the presidential office. Many experts believe he is President Lukashenko’s sparring partner. In 2010, Gaidukevich withdrew from the presidential race at the nomination stage. Back then, there were several candidates offering different programmes. This divided the opposition electorate, and the differences between the opposition parties ultimately prevented them from adopting the joint strategy of boycott. Meanwhile, pro-Russian views and loyalty towards the LDP leader may have attracted some Lukashenko supporters who felt a change in leadership was overdue. 

In 2015, the authorities would like to avoid situations from the 2010 presidential campaign, such as numerous candidates who took citizens out into the streets on election day, unable to control them, and the subsequent crackdown on protesters by the security forces. The authorities’ heavy-handed  actions caused a deep rift in Belarusian society and frustrated dialogue with the West, while the monetary and financial crisis and the bomb explosion in the Minsk subway made matters worse. 

For the Belarusian leadership, the events in Kiev in late 2013 – early 2014, while more tragic, bore a similarity to those in Minsk in 2010 as the systemic opposition had little effect, in their view. The Belarusian authorities fear that if the 2010 scenario repeats in Minsk, it could trigger a crisis of governance, which, amid instability in the region and the Kremlin’s geopolitical ambitions, could lead to undesired developments in the “Ukrainian style.” 

In the 2015 presidential elections, the Belarusian authorities would like to see a limited number of candidates with moderate rhetoric, who would be able to control their electorate. The Deputy Chairman of the LDP party, Gaidukevich junior underscored, “Sergei Gaidukevich and Lukashenko will be the candidates, and as soon as the elections are announced, the opposition will accelerate, hold their Congress in the same week (we’ll help to accelerate them) and nominate a candidate from the opposition. Maybe they will fail to agree among themselves – then we’ll have two candidates from the opposition. We do not believe there will be anybody else.” 

The Belarusian authorities care more about preventing a repeat of the 2010 election scenario, than they care about the elections’ timing. They are ready to reduce pressure on the opposition in order to narrow the divide in Belarusian society ahead of the 2015 presidential elections in exchange for less radical rhetoric by the opposition.

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Growth in real wages may disrupt macroeconomic balance in Belarus
October 02, 2017 12:12
Фото: Дмитрий Брушко, TUT.BY

The rapid increase in wages has led to a decline in the ratio between labour productivity and real wages to one. Previously, the rule was that enterprises, in which the state owned more than 50% of shares in the founding capital, were not allowed increasing salaries if this ratio was equal to or less than one. The authorities are unlikely to be able to meet the wage growth requirement without long-term consequences for the economy. Hence, the government is likely to contain wage growth for the sake of economic growth.

According to Belstat, In January – August 2017, GDP growth was 1.6%. The economic revival has led to an increase in wages. In August, the average monthly wage was BYN 844.4 or USD 435, i.e. grew by 6.6% since early 2017, adjusted for inflation. This has reduced the ratio between labour productivity and real wages from 1.03 in January 2017 to 1 in the first seven months of 2017. This parameter should not be less than 1, otherwise, the economy starts accumulating imbalances.

The need for faster growth in labour productivity over wage growth was stated in Decree No 744 of July 31st, 2014. The decree enabled wages growth at state organizations and organizations with more than 50% of state-owned shares only if the ratio between growth in labour productivity and wages was higher than 1. Taking into account the state's share in the economy, this rule has had impact on most of the country's key enterprises. In 2013 -2014 wages grew rapidly, which resulted in devaluation in 2014-2015.

Faster wage growth as compared with growth in labour productivity carries a number of risks. Enterprises increase cost of wages, which subsequently leads to a decrease in the competitiveness of products on the domestic and foreign markets. In construction, wholesale, retail trade, and some other industries the growth rate of prime cost in 2017 outpaces the dynamics of revenue growth. This is likely to lead to a decrease in profits and a decrease in investments for further development. Amid wage growth, the population is likely to increase import consumption and reduce currency sales, which would reduce the National Bank's ability to repay foreign and domestic liabilities.

The Belarusian government is facing a dilemma – either to comply with the president’s requirement of a BYN 1000 monthly wage, which could lead to new economic imbalances and could further affect the national currency value, or to suspend the wage growth in order to retain the achieved economic results. That said, the first option bears a greater number of negative consequences for the nomenclature.

Overall, the rapid growth in wages no longer corresponds the pace of economic development. The government is likely to retain the economic growth and retrain further growth in wages. Staff reshuffles are unlikely to follow the failure to meet the wage growth requirement.